Studies say that some luxury brands that have chosen to enter the market are not surprising. For example, Gucci has partnered with the online resale platform The RealReal to recycle and upcycle products, Richemont of Switzerland has acquired the UK-based watch market Watchfinder, and French luxury giant Kering has become Bestiere Collective. I invested.
However, many brands are uncertain about how best to deal with this phenomenon, raising concerns about their jealous brand identity and their potential impact on margins. However, McKinsey says these companies need to be more concerned about getting exciting growth opportunities.
Exploring a fast-growing resale market can not only open up new sources of revenue for luxury brands, but can also have a positive impact on brand loyalty and buyers’ desires, McKinsey reports. I am saying. The estimated $ 25 to $ 30 billion global luxury goods resale market is expected to grow at 10 to 15 percent annually over the next decade.
“Our findings confirm the appeal of resale transactions. If done carefully, brand entry shouldn’t hurt margins, it only results in limited cannibalism,” the report said. “What is clear is that luxury resale remains here, and brands that choose not to participate risk missing significant opportunities.”
McKinsey emphasizes that entering the resale market for luxury brands can have a positive impact on consumers’ perceptions of the business, even if they just buy new clothing themselves. ..
Fifty-four percent of new product buyers surveyed by the company agreed that their perception of the desirability of luxury brands that expanded to resale was positive, or at least unchanged, as long as the customer experience was consistent. .. In contrast, only 5 percent opposed this statement.
Forty-six percent of new product buyers surveyed also agreed with the statement that “brands that sell or support second-hand shops / platforms directly do not change my perception of the brand.” .. Buy more new products from luxury brands that offer second hand goods in the future.
However, as highlighted in the report, companies need to keep in mind that the markets in each country are different. Indeed, both French and US consumers generally answered the above question positively, but Japanese consumers were negative about the reaction to the idea that luxury brands would move to second-hand goods.
Currently, the two largest markets for second-hand luxury goods are the European Union and the United States, with China accounting for about 10% of the global market.
According to a McKinsey study, 41% of people who buy second-hand goods buy second-hand goods as to why consumers are motivated to buy second-hand goods. This will give you access to hard-to-find or obsolete items. ..
40% also cite sustainability as a reason to buy second-hand goods, while 36% are an economical choice to save money or make it possible to buy the desired product in the first place.
It’s important to consider the needs and motivations of this part of the community for brands looking to resell, as three-quarters of second-hand luxury buyers are also resellers. In particular, the survey states that 41% of resellers chose to sell second-hand goods to free up space in the closet, and 36% sold merchandise because of a change in style.
McKinsey wants to move to resale Luxury brands “may find a way to appeal to a particular customer segment”, products from last season to more efficiently organize or buy the market for collectors We propose to streamline the trade-in process for consumers who are trying to sell works from the latest collection.
Fiber2Fashion News Desk (DS)
Considering resale opens up new sources of revenue for luxury brands: McKinsey
Source link Considering resale opens up new sources of revenue for luxury brands: McKinsey